At a time when Israel needs all the friends it can find, Prime Minister Benjamin Netanyahu seems determined to deepen his country's diplomatic isolation and raise the international anger over its settlement policies.

The day after the United Nations voted 138-9 to grant the Palestinian Authority observer status, Netanyahu announced plans to build Israel settlements in a 4.6-square-mile tract of the West Bank, known as E1.

While this settlement would not cut the West Bank in two, as some have contended, it would hinder access to East Jerusalem, where the Palestinians want to establish their capital, and throw another barrier in the way of a two-state solution, settling Palestinians' claims for land.

Netanyahu's government cited as justification for settling E1 the Palestinian Authority's seeking U.N. recognition in violation of a 1995 addition to the Oslo Accords that neither Israel nor the Palestinians would take any step to alter the status of the West Bank while negotiations on territory are pending.

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Israel's settlement of E1 would be a violation of the same accord. All of its settlements in the territory it has occupied since the 1967 war are illegal under the Geneva Conventions and U.N. resolutions.

The new settlement announcement provoked dismay among European countries that Israel should be able to count on for support.

Only Canada, Panama, the Czech Republic and four Pacific island states had joined the United States in opposing United Nations recognition of the Palestinian Authority. France, Italy, Spain, Norway, Denmark and Turkey all voted for observer status, while Germany abstained.

Israel could have viewed the vote another way. It bolstered the Palestinian Authority at a time when Hamas, which rules the Gaza Strip, was claiming victory for its rocket attacks against Israel. The application for observer status defined Palestinian territory as of 1967, apparently rejecting larger territorial claims. Hamas, on the other hand, remains committed to Israel's destruction.

In a larger sense, the U.N. vote is meaningless, as Israel asserts. No solution can be reached except in direct negotiations with Israel. That agreement still may be years away, given the divisions among Palestinians. However, a two-state solution should not have more obstacles, such as the settlement of E1, placed in its way. The hope is that Netanyahu's plan is only a bluff, intended to bolster his standing prior to parliamentary elections in January.